eCommerce: Empower Your eStore With Affiliate Networks. Part I.

There’s two types of online offerings: those that you sell and those that other parties sell and pay you an affiliate fee for directing your users to them. There’re different reasons why to use or not to use affiliate networks. Eventually our major objective here is to outline viable ways of exploiting affiliate networks to provide more powerful offering to your users and implications from using it. Also, we are discussing methods of using affiliate networks to serve the core eBusiness needs, this means that the post is addressing needs of savvy eCommerce businesses that strive to achieve a lot due to efficient, “custom” and innovative way of using affiliate networks. This is quite opposite to adding a single banner to a personal photo blog.

Let’s see what could be these scenarios of using affiliate networks.

Possible Scenarios:

  • Build your own metaphor using 3rd party offerings. And own metaphor is a key phrase here. For instance, you hatch out the plan to rock the world via introducing the new type of personalized product offerings, for let’s say, young moms swarming on your site and discussing best ways to grow their kids healthy, happy and smart. You would like your eCommerce system to be able to parse their conversation, identify “problems” and provide relevant offerings from the affiliate network that would match this business domain the best. And moms would be happy because the system would “guess” what they have problems with.
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It is not necessarily the only example, but it conveys the idea well: initially affiliate network is just a collection of offerings, you can organize it around some breath taking idea that brings “life” to that list.

  • Enrich your offering with additional ones. For instance, you have an online store and your own products in it, but when user picks one, system would provides a list of accessories products which you don’t originally have but they are available from affiliates.
Generally the advantages of using affiliate networks are the following:

Advantages:

  • Excess of items. Many of the affiliate networks have thousands or tens thousands offerings in their database and this all is virtually available.
  • No need to manage inventory, shipping etc. Because all that lies on shoulders of Affiliate Networks.
But there are also risks related to use of this model, which is worth of careful consideration prior to plunging into it:

Risks:

  • Each affiliate network is a dependency for your eCommerce site. If it dies or terminates the service or changes business model or else, you may go down too. So the good strategy would be to diversify your data sources and use (or be ready to) alternative networks.
  • Get ready for incomplete or incorrect data in feeds, system downtime, outdated offerings etc. This is the disappointing reality that might happen when using some new network or vertically specializing networks. Usually big players (like Amazon) ain’t fraught with this kind of problems.
  • Back-office integration. The big deal of using affiliate networks in your eBusiness is in the back-office. Whenever your cost model is CPA or CPC you need to be able to accurately retrieve various statistics from the network on how much your business earned. This is sometimes difficult, believe it or not but there’re networks that prepare the statistics manually or semi-manually and thus you may get excel report like this:
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The reality sometimes is – you will go to a network web site, log on, manually retrieve your data (because there’s no programmable interface to automate the process). Then you run your own tool to upload the data to your database for further analysis. But it turns out that data is incorrect, like in example above, for instance or worse. And you getting back to their support service and tell them about the problem and they finally see it’s true and promise to make it work very soon. In two days you see they corrected the system but a file contains some entries with shorted product_id which does not correspond to any actual product and so on… Sounds like a full time job.

But good strategy leads to good solution and if risks properly managed, it pays off very well.
Another important aspect to consider when choosing an Affiliate Network is specific features that go along with the data feed. Let’s consider examples:

One of the main features for Shopzialla is Comparison Shopping. If this is what you want to employ on your eStore, then Shopzilla is right choice for you:
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If you want to access huge amount of products along with user generated metadata, then Amazon feed is good for such purpose:
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If the idea is to benefit on different coupons and discounts, you should use Savings.com:
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to be continued…

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